The Gift of Giving

Why should we give money to charity? Why should we give money to anyone at all (barring birthdays and holidays) for that matter? This is a fundamental question we may ask ourselves before pursuing any philanthropic action. I’m here to convince you that giving is actually a self-beneficial action- that is, you will receive net benefits when you give to charity. Just as a sales representative will try to give you reasons why buying their product will benefit you, I am here to do the same.

Before we get into the meat of the argument, however, it is important to note that “giving”, or “charity” is not necessarily tied to money. You can give your time, manpower, blood, even a smile. Dale Carnegie, regarding the powerfully positive effects of smiling, once wrote:

It costs nothing, but creates much. It enriches those who receive, without impoverishing those who give. It happens in a flash and the memory of it sometimes lasts forever. It creates happiness in the home, fosters goodwill in a business, and is the countersign of friends. It is rest to the weary, daylight to the discouraged, sunshine to the sad, and nature's best antidote for trouble.

The central thesis to my argument is that giving is, perhaps unintentionally, selfish. I know what you’re thinking: that’s counterintuitive, absurd, and just doesn’t make any sense. But it does. Rather than giving something away to someone else that inflicts a net cost on ourselves, we are simply exchanging one thing- be it money, time, or energy, for another: our own happiness and fulfillment. In a study (published in the journal Science) of a group of college students regarding their levels of happiness, participants were randomly given either $5 or $20. Half of the participants were instructed to spend the money on themselves, and the other half were told to spend it on others, such as giving to charity or giving a gift to a friend. In summary, about ¼ of the participants spent $5 on themselves, ¼ spent $5 on someone else, ¼ spent $20 on themselves, and ¼ spent $20 on someone else. In the evening, the researchers once more asked the students how happy they were. The results were remarkable. As it turns out, the primary indicator of a participants’ happiness post-study was how they spent the money: those who gave were reportedly much happier than those who didn’t. And the real kicker: At both the $5 and $20 levels, those who gave the money were happier than those who spent it on themselves.

In a separate study the same researchers tracked the happiness levels of 16 employees who received a profit-sharing bonus. Not surprisingly, those who gave their bonuses or spent their bonuses on others were significantly happier than those who kept their bonuses to themselves.

While we usually think that giving is good from a moral standpoint, more often than not we assume that it becomes a burden on our individual utility, whether utility is defined as time, money, energy, etc. However, without even realizing it, we end up trading one form of utility for another. So, although we may end up with a little less money, time, or energy, we become much happier. And before you turn your head the other way the next time an opportunity to give comes your way, try to recall: can you remember when was the last time someone gave money away and regretted it? Neither can I.